How do Funeral Plans Work?

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Learn about funeral plans, what they cover, things to consider, and how they can provide peace of mind.

Being organised and prepared for future life events is something many of us deal with on a day to day basis. Whether that’s saving money for our childrens’ future or having a will prepared in the event that something happens to us. But are you prepared beyond this? Have you ever thought about putting a funeral plan into place before you pass away? 

Of course no one wants to think about their own mortality, but sadly death is an inevitable event that we will all face at some point. When, where and how we cannot control, but we can control what plans we put in place ahead of time.

Perhaps most importantly, a funeral plan provides the opportunity to pay for your funeral in advance, giving you the peace of mind that your loved ones will be protected from unexpected costs in the event of your passing. With the average cost of a basic funeral at more than £4,000 in the UK, paying in advance for a funeral plan (or paying monthly) is becoming an increasingly popular choice for many, and understandably so. 

What is included in a funeral plan?

A prepaid funeral plan allows you to not only decide exactly what you want included in your funeral but enables you to also pay for the essential elements up front. Plans usually cover most of the costs associated with a funeral including:

  • Transport of the body to the funeral home
  • Care of the body
  • Visiting the body in the chapel of rest
  • A coffin, hearse and funeral director fees
  • An allowance towards burial or cremation costs

All funeral plans will be different, so it’s important to take the time to research and choose the one that you feel is best for you or your family member. It’s helpful to remember that funeral plans are not a one-stop-shop, and there will be other fees that the plan does not cover. As a general rule, funeral plans normally do not include:

  • Burial plot and some burial fees
  • Headstone/memorial
  • Funeral notices
  • Order sheeting
  • Embalming
  • Flowers, catering and other costs for a wake 

It may be a good idea to compare the different basic, standard and comprehensive funeral plans available to you, so you can make an informed decision. And finally, tell your family members that you have invested in a funeral plan and who the plan is with. 

Naturally  this is not a conversation that many of us want to have with our loved ones, however, it will save them the trouble of trying to hunt down which plan you went for when the time comes. It’s also worth noting that a funeral plan provider could repatriate the money if the plan goes unpaid. 

What are the benefits of a funeral plan? 

There are numerous benefits when it comes to choosing a funeral plan, the main one being peace of mind. By pre-paying for your funeral you know you’ll have saved your family from the worry of funeral costs and arrangements. It also puts you in control of your burial or cremation wishes and allows you to arrange the send off you really want.

By paying for your funeral at today’s prices you can also avoid any potential future increase in the cost of these services. If affording your funeral now is a concern, then don’t worry as most funeral plan providers have various payment options available.  You can pay the lump sum, pay over 12 months or spread the cost over up to 30 years. 

A funeral plan is likely to be worth it if you have the cash to pay for one upfront, if you think your family would struggle to cope with organising and funding your funeral, or you’re unlikely to have enough money left in your estate to pay for your funeral when you die. 

Is my money safe?

You are going to want to make sure your money is safe – and rightly so! Most reputable funeral plans will come with added protection so there’s no need to worry about your money going astray. This means your money will be transferred and held with an authorised provider until the time comes where it will be needed to deliver your funeral plans. 

In July 2022 the Financial Conduct Authority (FCA)  began regulating firms that provide and arrange funeral plans. This means that even if the provider goes bust you’ll be protected by the Financial Services Compensation Scheme and either the funeral will be paid for or you’ll get a refund. The FCA has authorised 26 prepaid funeral providers which collectively hold 1.6 million plans, making up 87% of the market. 

Some funeral plan providers, including The Co-op and Avalon will pay out for a funeral if you sadly die within two years of taking out your plan, as long as you’ve paid the first 12 months of instalments. 

In summary, funeral plans can ease the financial and emotional burden on your family at a distressing time and are a promising option for those who can afford it. If you’re considering buying a plan it’s essential you read all the documentation beforehand to understand what is and what isn’t included. Once you’ve chosen your preferred plan, and it’s all put into place, you can then rest easy knowing that you’ve helped your loved ones avoid the financial stress of funeral planning and that your final wishes will be observed.

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